The $84.25 figure ignores other essential costs such as software and licensing fees, meaning Amazon spends more than $5.25 to sell you a Kindle.

Main Street writes that the costs are bigger for the Kindle Fire. Amazon sells those at a $10 loss each. It's no problem to lose a little more on the Fire because it can direct users to spend money on more Amazon services like Cloud Drive or Video On Demand.

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.